Beware your CC might be in deregistration

With effect from 1 September 2008, it has become compulsory for every close corporation (“”CC””) to lodge an annual return with the Registrar of Close Corporations (“”the Registrar””) on payment of a prescribed fee. Even if a CC is dormant, in other words it is not doing business at the moment but intends to do so in the future or only owns a private residential property, it still has to comply with the annual return requirements.

The lodgement of annual returns has two purposes. Firstly, it provides the Registrar with the latest information of the CC, such as its contact numbers and address and information regarding its accounting officer. Secondly, it enables the Registrar to determine whether the CC is still in business. It should be noted that the lodgement of an annual return does not exempt your CC from lodging other returns like a change of membership or accounting officer.

The annual return must be lodged electronically on the Companies and Intellectual Property Registration Offices (“”CIPRO””) website, www.cipro.gov.za, within two months of the anniversary of the registration date of the CC. Failure to file an annual return within the time limit will lead to a penalty being levied and ultimately, the deregistration of your CC. If deregistered, it means that your CC will lose its status as a separate legal entity and the members can be held personally liable to the CCs creditors for all outstanding liabilities. Furthermore, all the CCs assets are forfeited to the state.

Now is the time to be more vigilant, as CIPRO has indicated that it will be clamping down on non compliant CCs this year.

TAXtalk: www.taxtalk.co.za

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